The Option Alpha Podcast

Show Notes: https://optionalpha.com/show232Navigating options expiration is a critical skill for traders, especially with the rise of daily expirations.This week’s podcast explores the top 7 automated tips and tricks you can use inside Option Alpha to set up your portfolio for better options expiration management.See all 7 tips hereAdjust exit options as you near expirationCheck the extrinsic value of your positions/legsCheck the probability of short legs being ITMDon’t use market orders, use...

Show Notes: https://optionalpha.com/show231This week we explore the latest and most pressing challenges emerging for investors who have embraced autotrading.As automation revolutionizes the financial markets, traders find themselves navigating uncharted psychological territory. From trusting bots and algorithms, coping with reduced decision-making control, and the novel complexities of autotrading that demand a new style of adaptation and resilience. With help from our team, I’ll peel back th...

Show Notes: https://optionalpha.com/show230 This week I explore a deep and philosophical viewpoint into the world of automated trading and its inevitable rise for investors. I explore the evolutionary nature of human decision-making and its limitations in complex financial markets by examining cognitive biases and their impact on manual trading. I’ll also discuss the technological advancements driving this shift, risk management in autotrading, and the future trends and challenges in this rap...

AI is the hot new buzzword these days, sparked by the release of ChatGPT a few months ago. Since then, it seems everyone has used OpenAI’s software in fascinating (and sometimes scary) ways. So, I jumped into ChatGPT and asked it to come up with the top questions that new and advanced traders ask about options trading. This week's podcast explores the 15 questions - and answers - that options trades want to know.See all 15 answers hereWhat are options and how do they work?How much money...

How long does it take a stock to get back to even after a large daily move down? And does the magnitude impact how long it takes the position to recover the loss?We’ve all been in losing trades and wondered if we should hang on to the position for a little longer or cut it loose. So, to help answer the question, we studied the short-term performance of stocks and ETFs after different daily loss totals.The study analyzed 324 assets over a 20-year period. We calculated the 5-day returns followi...

Stocks have been described as a rubber band, and we often assume they will snap back and revert when prices become overextended. So, we wanted to know: How likely is a security to continue or reverse its momentum above and below major moving averages in short, medium, and long-term timeframes? And does the security’s proximity to a moving average impact its performance?We researched 20 years of data on 286 symbols, using short, mid, and long-term trends to analyze the ticker’s 30-day return r...

"The trend is your friend." It’s a popular saying amongst traders, and we hear it all the time. But is there validity in the statement?We backtested directional option selling strategies with a long-term trend filter to see if there is a significant impact on performance.We used Option Alpha's backtester to review the data for SPY, GLD, and TLT short put spreads and short call spreads. Short put spread tests included a filter to only enter trades above the 200-day moving average. Short ...

This week we take a look at the performance of the Monthly Iron Condors ($3k Portfolio) bot template. You might recall that we previously did a deep dive on this template back on Show 214, walking through the strategy setup, the scanner and monitor automation setups, etc. But now that we’ve had it running for a little over a year, we thought it would be help to take a look at how it has weathered this year’s market volatility and explore possible ways to adjust or improve its performance in t...

Show Notes: https://optionalpha.com/show224Option spreads are a simple and flexible, yet powerful strategy for traders. And while spread strategies come in many forms, shapes, structures, and durations, some core elements are present in spread trading generally that new traders should pay attention to. On this week's show, we'll once again slow things down a bit and focus on understanding what option spreads are and how to trade spreads in your portfolio.

Show Notes: https://optionalpha.com/show223What if you could build an automated strategy that navigates all market conditions? And while we know there is no one-size-fits-all strategy, we believe you can design a bot strategy that assesses the market trend and proactively adapts to current conditions. This "trader's dream" finally manifested itself in a bot template that become the collective “brainchild” of the amazing Community of traders right here at Option Alpha! The Hexabot, as it's now...